To The Moon

1.Rethinking Resurgence RiskWhile attention is focusing in on recession risk, we still need to be mindful of the other edge of tail risks...Image2.Friendly Reminder: non-recession corrections tend to be short, sharp, and usually shallow.Recessionary corrections (probably better described as bear markets) tend to be deeper and more drawn-out...Image3.Big… DisappointmentAs you might expect, the journey to becoming a top-10 stock is amazingYou may also be unsurprised to learn that performance *after* becoming one of the top 10 stocks has historically been dismal on average. $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$

1.One for the BullsThe Stockmarket likes to bottom in March...(albeit, it likes October better) $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ Image2.US vs China Tech StocksChina AI breakthroughs challenging US Tech Supremacy narrativeRelative value (+absolute valuations) also helping $Invesco QQQ(QQQ)$ $Invesco China Technology ETF(CQQQ)$ Image3.Uncertainty Fatigue Hard to make business or investment decisions under a chaos-maxing policy backdrop...Image4.Here's how Seasonality looks like when the S&P500 is below its 200-day moving average.Maybe we get a rally into April?Image

The AI Hype Bubble Bursting…Quick extra angle on it; here’s the market cap weighting chart for the US Semiconductors industry. When you put it this way it sure looks bubble-like, and the problem with that is the peak is now in.The charitable interpretation is that this is just a correction on an eventual path higher, or even more generous would be that it’s just going to consolidate and range around a “new higher plateau”.The technology of AI is clearly here to stay and going to increase in importance over time if I had to guess, but in the short-term the meme of euphoric investor expectations and frenzied capex/investment in the AI gold rush looks set to take a breather.To me it looks like a classic melding of the market cycle, the hype cycle, and the bubble cycle

1.Here's how Seasonality looks like when the S&P500 $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ is below its 200-day moving average.Maybe we get a rally into April?Image2.Platinum is classified as a Precious MetalBut it acts more like an Industrial metalThis is important because it is currently caught between macro cross-currents (hence this unique technical pattern unfolding)Image3.Friendly Reminder: non-recession corrections tend to be short, sharp, and usually shallow.Recessionary corrections (probably better described as bear markets) tend to be deeper and more drawn-out...Image

Trump and Team have a clear plan for Macro CatharsisHere's why it's smart (but also risky)-short-term pain for long-term gain--get painful reforms like fiscal cuts front-loaded--unwind excesses like overvalued/overhyped stockmarket--face the music on the macro cycle early on in the term (and blame it all on Biden)-bounce back into boom for next electionsAt the same time it gets rates lower, dollar lower, which makes US firms more competitive (and pairs with the tariff and reshoring aspects); so it may help with US industrial revival.The risks-when you haven't had a proper recession in 15-years it could expose a bunch of vulnerabilities (crisis risk)-the unwind can be a bit unwindier than expected (get more than you bargained for on the reset front)-potential long-term damage to risk taking

1.Gold Flows $Gold - main 2504(GCmain)$ February saw record inflows into gold funds; most likely a mix of performance chasing as people start to take notice of higher gold prices, but also as a defense against rising uncertainty and tariff risk.From BofA via barchart: “Gold sees largest 4-week inflow in history of $4.9 Billion" 2.US Imports of Gold BarsOn a similar note, there’s been a record level of imports of gold bars into the USA — it’s a widely covered issue, but still stark to see the chart. 3.Silver vs Miners $Silver - main 2505(SImain)$ The chart below shows the Silver price in the red and the Philadelphia Gold and Silver Index in the blue (an index of 30 precious metal mining companies).

The worst kept secret of the Gold $Gold - main 2504(GCmain)$ Bull Market is how poorly gold miners have been performing...While gold is hovering around all-time highs, global gold miners’ market cap weighting is sitting just below long-term average.ImageHours of work required to buy 1 oz of gold has reached a record high This level has been a stumbling block in the past, why should we believe this time will be any different?ImageLearnings and conclusions from this week’s charts:Reading only the technicals it looks like a bull market correction.Sentiment and positioning support the case for a short-term rebound.(but) Valuations/Allocations still point to caution on the longer-term.There’s been a sharp Global (up) vs USA (down) rota…

1.Pick of the Pack — Global Equity ValuationsThis month’s pick of the pack is a chart showing valuation indicators for the 3 major chunks of global equities...The key point is US is rolling over from extreme expensive, and RoW is cheap $S&P 500(.SPX)$ $NASDAQ 100(NDX)$ Image2.LatAm Equities are starting to look very interesting...This chart showing improved technicals and earnings momentum + combined with the backdrop of cheap valuations makes for a compelling bullish setup.Image3.Here's the annual chart for the $Cboe Volatility Index(VIX)$ -sure seems to move in cycles-looks like we're at/near a cycle base-certainly can think of some catalysts...Image

Perspective Check: Here’s how the current drawdown in the S&P500 $S&P 500(.SPX)$ is tracking vs history — it’s basically just noise at this stage…But the reason I picked this chart is it serves as a timely risk-management reminder:5-10% corrections are fairly common,10-20% corrections are not uncommon,and 20-30%+ downsides happen about at least once a decade (so if you invest for long enough, you *definitely will* experience at least one major downturn)It’s a reminder to be prepared, either through process (e.g. having a good objective and reliable approach to lighten exposure to downside in bear markets, and paying attention to asset allocation and smart diversification) and/or psychology (having the right mindset to stay the course, havi

The biggest stocks get the most analyst attention. Interestingly, 73 analysts cover $Amazon.com(AMZN)$ , 72 $Meta Platforms, Inc.(META)$ , and 66 $NVIDIA(NVDA)$ — you’d think these companies are well enough understood that they wouldn’t need that many people covering them… and if anything investors might benefit more from smaller stocks getting greater coverage $Apple(AAPL)$ $Microsoft(MSFT)$ $Alphabet(GOOG)$ $Alphabet(GOOGL)$ $Tesla Motors(TSLA)$